Iowa Minimum Wage 2026

Employees Covered by Iowa Minimum Wage

Iowa minimum wage law covers employees as defined in the federal Fair Labor Standards Act. Unless specifically exempted, covered employees include:

• Private sector workers: Full-time and part-time employees of private businesses meeting coverage thresholds
• Hourly employees: Workers compensated on an hourly basis
• Salaried non-exempt employees: Employees paid on a salary basis who do not qualify for overtime exemption under FLSA standards
• Temporary and seasonal workers: Employees working on a temporary or seasonal basis for covered employers
• Minor employees: Workers under age 18, subject to child labor law restrictions
• Public employees: Employees of public agencies and governmental entities

Employer Coverage Requirements

Iowa minimum wage law applies to employers who meet federal Fair Labor Standards Act definitions. Generally, the following employers must comply with Iowa minimum wage requirements:

Covered by annual gross sales: Employers with annual gross sales or business of at least $300,000 must pay the minimum wage to covered employees.

Covered regardless of sales volume:

• Public agencies
• Construction entities engaged in construction or reconstruction
• Hospitals, both for-profit and nonprofit
• Institutions caring for the sick, aged, or mentally ill
• Schools, preschools, and day care centers meeting FLSA definitions
• Enterprises engaged in interstate commerce

Small retail and service establishments grossing less than $300,000 annually are generally not required to pay the Iowa minimum wage unless they fall into one of the categories covered regardless of sales volume. However, even employers exempt from Iowa minimum wage requirements may be covered by the federal Fair Labor Standards Act and required to pay at least the federal minimum wage of $7.25 per hour.

Exemptions from Minimum Wage Requirements

The following categories of employees may be exempt from Iowa minimum wage requirements under Iowa Code § 91D.1(2), which incorporates the exemptions stated in 29 U.S.C. § 213 of the Fair Labor Standards Act:

Executive, Administrative, and Professional Employees
Employees performing bona fide executive, administrative, or professional duties may be exempt if they meet both salary and duties tests under federal regulations. The salary threshold for exempt status under federal law is $844 per week ($43,888 annually) as of July 1, 2024, increasing to $1,128 per week ($58,656 annually) as of January 1, 2025. Exempt employees must also perform primarily exempt duties as defined in 29 C.F.R. § 541.

Outside Sales Employees
Employees whose primary duty is making sales away from the employer’s place of business and who are customarily and regularly engaged away from the employer’s business location are exempt from minimum wage requirements under both Iowa and federal law.

Certain Retail or Service Establishment Employees
Iowa law modifies the FLSA exemption at 29 U.S.C. § 213(a)(2) for certain retail or service establishments. Under Iowa Code § 91D.1(2), this exemption applies only to enterprises comprised of one or more retail or service establishments whose annual gross volume of sales or business is less than 60 percent of the amount stated in federal law (currently $500,000), which means less than $300,000 annually.

Agricultural Workers
Agricultural employees may be exempt from Iowa minimum wage requirements depending on the size and nature of the farming operation, consistent with federal exemptions at 29 U.S.C. § 213(a)(6).

Employees with Disabilities
Employers may obtain special certificates from the U.S. Department of Labor authorizing payment of subminimum wages to workers whose productive capacity is impaired by physical or mental disability, under 29 U.S.C. § 214(c). These certificates must be renewed periodically and require specific documentation of the employee’s productivity.

Independent Contractors
Properly classified independent contractors are not employees and therefore not covered by minimum wage requirements. Iowa applies the test described in Iowa Code § 85.61(12)(c)(3) for determining independent contractor status in workers’ compensation contexts. Misclassification of employees as independent contractors may result in penalties, back wages, and tax liability.

Training Wage Provisions

Federal Training Wage (under age 20):
Under federal law at 29 U.S.C. § 206(g), employers may pay employees under age 20 a training wage of $4.25 per hour during their first 90 consecutive calendar days of employment. After 90 days, or when the employee turns 20 (whichever comes first), the employer must pay at least the full minimum wage.

Iowa Initial Employment Wage (all ages):
Iowa law at Iowa Code § 91D.1 permits employers to pay an initial employment wage of $6.35 per hour during an employee’s first 90 calendar days of employment, regardless of the employee’s age. This provision applies to all new employees and is separate from the federal training wage for workers under age 20.

An employer covered by both state and federal law could theoretically pay an employee under age 20 the federal training wage of $4.25 per hour for the first 90 days. However, if the employee is age 20 or older, the employer may only use Iowa’s initial employment wage of $6.35 per hour for the first 90 days.